Introduction to Business

Section 1: The Basics of Saving Accounts

Self-Checks

1.
The money you save is called your __________ .
A)assets
B)investments
C)savings
D)wealth
2.
The cost __________ of a decision is the same as the benefit of the choice that is given up when one decision is made instead of another.
A)absolute
B)beneficial
C)net
D)opportunity
3.
The percentage increase in the value of your savings from earned interest is the __________ .
A)interest rate
B)rate of return
C)return factor
D)savings ratio
4.
Experts recommend that people set aside at least __________ of income for emergencies.
A)three months
B)six months
C)twelve months
D)eighteen months
5.
Some personal finance experts suggest people should try to save __________ .
A)10 percent of take-home pay
B)12 percent of gross pay
C)$100 per month
D)a nickel of every dollar you earn
6.
Interest earned only on the money deposited into a savings account is called __________ .
A)easy interest
B)principal interest
C)simple interest
D)straight interest
7.
Interest earned on the principal and any interest earned on the principal is __________ .
A)combination interest
B)complex interest
C)composite interest
D)compound interest
8.
Using the Rule of 72, you could expect to double your investment in __________ if the interest rate is eight percent.
A)9 months
B)9 years
C)48 months
D)48 years
9.
You save $100 per month in an account paying 5 percent interest. In 10 years you have approximately $15,500 in the account. The interest earned is about __________ .
A)$600
B)$1,550
C)$3,500
D)$5,500
10.
If you put $500 in a savings account today and the account pays 10 percent interest annually, one year from now your account would contain __________ .
A)about $500
B)close to $550
C)more than $600
D)more than $1,000
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